Question

Prepare journal entries for each transaction and identify the financial statement impact of each entry. The financial statements are automatically generated based on the journal entries recorded. Jan. 1 Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock. Jan. 2 The company purchased office supplies for $1,250 cash. Jan. 3 The company purchased $10,050 of office equipment on credit. Jan. 4 The company received $15,500 cash as fees for services provided to a customer. Jan. 5 The company paid $10,050 cash to settle the payable for the office equipment purchased on January 3. Jan. 6 The company billed a customer $2,700 as fees for services provided. Jan. 7 The company paid $1,225 cash for the monthly rent. Jan. 8 The company collected $1,125 cash as partial payment for the account receivable created on January 6. Jan. 9 The company paid $10,000 cash in dividends to the owner (sole shareholder).

Answer 1

Solution.

Date	Particulars	Amount Dr.	Amount Cr.	Effect
1-Jan	Cash	100,750		Balance sheet
	Common stock		100,750
	(Being common stock purchase by cash)
2-Jan	Office supplies	1,250		Balance sheet
	Cash		1,250
	(Being Office supplies purchase by cash)
3-Jan	Office equipment	10,050		Balance sheet
	Account payable		10,050
	(Being office equipment purchase on credit)
4-Jan	Cash	15,500		Income Statement
	Fees earned		15,500
	(Being cash received from coustmer)
5-Jan	Account payable	10,050		Balance sheet
	Cash		10,050
	(Being cash paid to debtor)
6-Jan	Account receivable	2,700		Balance sheet
	Fees earned		2,700
	(Being revnue earned but not received)
7-Jan	Rent expense	1,225		Income Statement
	Cash		1,225
	(Being rent paid in cash)
8-Jan	Cash	1,125		Balance sheet
	Account receivable		1,125
	(Being cash received in cash)
9-Jan	Dividend	10,000		Balance sheet
	Cash		10,000
	(Being dividend paid in cash)